Great news for authors: when the annual cheque from their library loans arrives in February, they won't be able to order champagne, but they will still be able to eat.

Public lending right (PLR) – the body that pays them a sum each time their book is borrowed in a library – is cutting its rate per loan to suit these cash-strapped times – but it's a relatively small dip, from 6.29 pence per loan to 6.25.

Authors for whom PLR is a much-needed financial boost won't be happy – but the truth is it's probably not as bad as some of them were fearing. In general, writers have greeted the news that the PLR fund is to be cut by around 6% in real terms over the next four years with a sense of worst disaster averted – for now.

Oddly enough, what is really getting authors hot under the collar right now is less the cash that Public Lending Right distributes, than the future of the organisation itself.

Jeremy Hunt, the culture secretary, announced in October that the body – confusingly enough, also called Public Lending Right – would be scrapped in his grand bonfire of the quangos, with its function transferred to some other, unspecified body.

Hunt promised that pruning back these public bodies would increase "efficiency, transparency and accountability" – just what we always wanted – and offer "better value for money for the public".

Fine words but when it comes to PLR, the parsnips are definitely in need of butter. Public Lending Right is a tiny organisation based – far away from London's literary hotspots – in inexpensive Stockton-on-Tees. It has only a handful of members of staff, and its running costs are only about 10% of its total budget, with all the rest going to authors.

It's been around for more than 30 years and has developed a lot of expertise in its niche area.

So who is supposed to take over the PLR's functions? At the moment nobody has a clue – possibly because the Department for Culture, Media and Sport is making its decisions on the hoof and doesn't know either. Arts Council England was once mooted as a likely home, but since they've now got to run their own admin on half the money, they're probably not that keen to take on anything more.

Mark Le Fanu, the usually mild-mannered general secretary of the Society of Authors, calls the decision to cull PLR "pointless" and "an entirely political gesture".

Novelist Katie Fforde, who is chair of the Romantic Novelists Association, has written to Jeremy Hunt to protest on behalf of her members, and many authors are doing the same individually, as well as lobbying their MPs.

Authors know that if PLR is not well run, and run efficiently, the running costs have to come out of the overall budget that pays their loans royalties each year. And as Tom Holland, chair of the Society of Authors, has pointed out, moving PLR around could have exactly the opposite effect to Jeremy Hunt's noble aims:

"Certainly, it would be ironic, and yet not wholly surprising, if an attempt to cut running costs only resulted in bureaucracy and inefficiency," Holland says.

So let's not have a perfectly good system – let alone jobs in Stockton-on-Tees – sacrificed purely for the sake of political targets and ministerial career prospects. As the saying goes, if it ain't broke, don't fix it.